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Capital One to acquire Brex for $5.15B

reuters.com

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Re: Capital One to acquire Brex for $5.15B

#131

Post by kelnos »

tempaccsoz5 wrote: post #116
xp84 wrote: post #95

Earlier quoted context omitted.

The reason is just that it would be more risky, I think. Compare the scenarios: 1. Scammer clones your credit card with a skimmer and pays for $500 of clothes at the mall. You dispute the charges. The funds are actually not given to the store for a bit given that credit transactions take a while to settle. Upon the dispute, the store now needs to prove that you were there and bought those clothes to get their $500, o…

So the protection is that debit cards take longer to pay out to merchants? An increased window to dispute charges doesn't strike me as innovative but more like an arbitrary variable from the CC company.

No, the protection is that when you pay with a credit card, no money has left any of your accounts, and you have plenty of time to dispute the charge before it does.

With a debit card, your money is out of your account, immediately, and you have to fight to get it back. For some banks, for some accounts, this isn't a big deal, and you might have it back in a few hours. But for others it might take weeks, and in the meantime you've failed to pay your rent or mortgage.

Re: Capital One to acquire Brex for $5.15B

#132

Post by xeromal »

churchill wrote: post #8

Pretty steep haircut from their $12b peak in 2022. And that's before you factor in their revenue that's grown 2.5* from ~$312M in 2022. If their figures are to be believed, Capital one is getting an asset growing 50% YoY, for just 7* revenues. Maybe just pull a Bending Spoons after the acquisition, layoff most of the staff, and bring a lot of ops in-house and they'll be in profit ASAP.

Not sure what's gonna happen to them of course, but C1 doesn't really layoff the entire team like that. They have a few acquisitions that merge in but often stay as their own business unit and have a fair amount of autonomy.

Re: Capital One to acquire Brex for $5.15B

#133

Post by rahimnathwani »

itake wrote: post #62
hn_throwaway_99 wrote: post #32

Earlier quoted context omitted.

Its not great for those who got in later rounds, but I would assume all the investors had at least 1X preferences, so they'll at least get all their money back. I think this is a pretty decent outcome for Brex. I read they received a total of 1.3 billion in funding, so a 5.15 billion exit isn't bad, especially since the bottom dropped out of the market for so many fintechs that were founded and had big raises between…

I'm curious how the employees faired. Seems like they may bet getting nothing out of the deal if the investors get their money back.

Brex has been around for a long time, so employees will have been issued stock options with vastly different exercise prices.

Early employees' options will have value, but more recent options are likely underwater.

Re: Capital One to acquire Brex for $5.15B

#134

Post by marssaxman »

blonder wrote: post #107
marssaxman wrote: post #101

Earlier quoted context omitted.

That has not been my experience at all. I've been using debit cards for all my everyday non-cash purchases for about thirty years now, and it's worked just fine. I expect to keep doing it indefinitely. I have had exactly one encounter with fraud: a vindinctive ex-girlfriend stole my card info and had herself a little shopping spree, emptying my checking account. I walked into the credit union branch, filed a report,…

May I ask why you eschew the basically free money that comes from credit card rewards as a responsible credit card user?

Is it really free money? Actual cash? I've always seen rewards programs advertised in terms of discounts on specific products or services: consumer electronics, cruise vacations, furniture, gift cards, and other things I rarely spend money on. I expect it to be an overstock clearinghouse, something like the old Columbia House record club, where you would page through a catalog of random stuff looking for anything you could convince yourself to settle for, just because you'd already paid for the subscription. It sounds like a hassle and I'd rather ignore it.

Re: Capital One to acquire Brex for $5.15B

#137

Post by marssaxman »

Spooky23 wrote: post #105
marssaxman wrote: post #101

Earlier quoted context omitted.

That has not been my experience at all. I've been using debit cards for all my everyday non-cash purchases for about thirty years now, and it's worked just fine. I expect to keep doing it indefinitely. I have had exactly one encounter with fraud: a vindinctive ex-girlfriend stole my card info and had herself a little shopping spree, emptying my checking account. I walked into the credit union branch, filed a report,…

You’re lucky. My colleague had his skimmed at a gas station and his bank froze his funds, causing his mortgage, car loans and other stuff to bounce. Major PITA.

I'm not lucky, I just don't use commercial banks. I had to get screwed over a few times before I learned that lesson, but it did eventually stick.

Re: Capital One to acquire Brex for $5.15B

#138

Post by bpodgursky »

rahimnathwani wrote: post #133
itake wrote: post #62

Earlier quoted context omitted.

I'm curious how the employees faired. Seems like they may bet getting nothing out of the deal if the investors get their money back.

Brex has been around for a long time, so employees will have been issued stock options with vastly different exercise prices. Early employees' options will have value, but more recent options are likely underwater.

I strongly suspect they shifted to RSUs at those valuations.

Re: Capital One to acquire Brex for $5.15B

#139

Post by itake »

rahimnathwani wrote: post #133
itake wrote: post #62

Earlier quoted context omitted.

I'm curious how the employees faired. Seems like they may bet getting nothing out of the deal if the investors get their money back.

Brex has been around for a long time, so employees will have been issued stock options with vastly different exercise prices. Early employees' options will have value, but more recent options are likely underwater.

options can only last 7 years, but brex was founded in 2017.

Re: Capital One to acquire Brex for $5.15B

#140

Post by coliveira »

bflesch wrote: post #38
rvz wrote: post #17

Earlier quoted context omitted.

That is a 50% discount, which isn't great for those who got into the latest round. Seems like Capital One is very excited on the deal and announced it earlier while Brex hid the announcement and made it hard to find. (It's on the Brex [0] journal directory, but you cannot see it featured on its front page) What (really) happened? [0] https://www.brex.com/journal

It's as easy as some VC bros desperately searching for a bigger fool and finding it. Most likely CapitalOne management consists of friends with the VCs. It's just another case of the principal/agent problem and normalized white-collar fraud in US tech.

I don't know why the downvotes, that's most probably what happened. These deals are rarely done for some economic reason, it's mostly because somebody knows someone else who can do it and get mutual benefit, a legalized version of fraud.
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